[Intl-tobacco] Can Koizumi Untangle Japan and Tobacco? (fwd)

[Robert Weissman]

June 13, 2001
Can Koizumi Untangle Japan and Tobacco?
By Stephanie Storm
New York Times, June 13

TOKYO, June l2 =97 For pushing through an ordinance banning cigarette
vending machines from the streets of his tiny town a few hundred miles
north of Tokyo, the World Health Organization wanted to bestow an award on
the mayor of Fukauramachi in honor of No Smoking Day last month.

But the mayor refused it. The law, the first in a country where cigarette
vending machines are as common as water fountains, does not take effect
until Oct. 1 and includes no penalties for violators =97 but some vending
machine owners are still fighting it.

"Until the end of September, we don't know what the consequences of the
ordinance will be, and I would say it lacks a soul until then," said Mayor
Takayoshi Hirasawa. "So it's still not the time to receive any kind of
award."

The tobacco industry is politically and economically powerful the world
over. But as the mayor knows, in Japan the industry's muscle is perhaps
mightier than anywhere else because cigarettes are the largest source of
government revenue.

In a country faced with a mountainous pile of debt, tax revenues mean a
lot, which explains one of the oddities of Japanese government:
antismoking measures proposed by the health ministry have been blocked by
the ministry in charge of finances.

Thus, smoking presents the fledgling government of Prime Minister
Junichiro Koizumi with one of its hardest choices. He can give teeth to
Japan's weak antismoking programs and eventually reduce a much-needed
source of funds or sacrifice public health in the interests of public
finance.

How and even whether Mr. Koizumi will choose is unclear. But anti- tobacco
groups are heartened by Mr. Koizumi's past. He quit smoking 20 years ago,
recently banned ashtrays from the cabinet meeting room and passionately
dislikes secondhand smoke.

Also, as health and welfare minister in 1997, he pushed through a white
paper containing six toughly worded pages on the health implications of
smoking over the strong objections of the powerful Finance Ministry, which
has historically vetoed even the most timid attempts to raise public
awareness about the risks of using tobacco.

No other health minister before or since has dared to challenge the
Finance Ministry, but Mr. Koizumi seems most comfortable being contrary.
"We are hopeful that he will show a similar interest in his current
capacity as prime minister," said Derek Yach, executive director of the
World Health Organization's Tobacco Free Initiative.

Japan is a haven for smokers and tobacco companies alike. Low prices and
modest, although increasing, public recognition of the health risks of
smoking place the country fourth in the world in its percentage of adults
who smoke =97 after South Korea, China and Russia =97 according to the
American Cancer Society. Smokers here light up more cigarettes each year
than in any other industrialized country, the equivalent of a pack a day
for every person.

In a nation with 666 trillion yen of government debt, or $5.6 trillion at
current exchange rates, sales of cigarettes generate more than $18 billion
in tax revenues annually. Roughly half that amount is passed on to Japan's
cash-shy local governments, many of which are in effect bankrupt. Some
$638 million more comes from corporate taxes paid by Japan Tobacco, the
former state-owned monopoly, which makes and distributes 75 percent of the
cigarettes sold here. On top of that, the government earns roughly $76
million in dividends from its remaining 67 percent stake in the company.
And those are just the financial benefits. The government also benefits in
a perverse way from the effects of a society that loves tobacco: people
die earlier than they otherwise might.

That puts less strain on the nation's severely underfinanced public and
private pension systems. In a country with a rapidly aging population and
a falling birthrate, promoting smoking, or at least only mildly
discouraging it, would seem like smart public policy.

"The Japanese government gets far more benefits than the damage that is
caused by smoking," said Takuro Morinaga, senior analyst at Sanwa Research
Institute and himself a chain-smoker who jokes that he deserves a
government reward for his habit. "That may sound drastic, but from a
fiscal point of view, smoking is a good thing."

More and more Japanese are realizing that public finance takes priority
over public health, and some are suing the government and Japan Tobacco.
"I blame the government and the Ministry of Finance for my problems," said
Teruo Araki, a 74-year- old former dentist whose 34-year-old habit of
smoking three or four packs of cigarettes a day cost him a lung 20 years
ago.

The government and tobacco seem to go hand-in-hand. Until last year, the
gift bags distributed annually to workers in the Imperial Palace in honor
of the emperor's birthday contained cigarettes, and Japan Tobacco donated
15 million cigarettes to nursing homes in honor of Respect for the Aged
Day. Then there is the wording on the warning labels on cigarette packages
here: "Since smoking might injure your health, let's be careful not to
smoke too much."

That "now, now" admonition comes not from the government's chief doctor,
but from the Finance Ministry, which is responsible for budgets and taxes.
Similarly, a 103- year-old law orders the ministry to look after the
welfare of the tobacco business.

"We think health issues related to tobacco should be addressed by the
officials responsible for maintaining people's health," said Michinobu
Omori, director of the tobacco and salt industries office at the Finance
Ministry. "We really don't have a big say, even though we own the stock of
Japan Tobacco."

But when asked about why warning labels on cigarette packs here are so
timid, the Ministry of Health, Labor and Welfare deferred to the Finance
Ministry. "Our ministry is not in a position to comment on that," said
Nobuyuki Takakura, director of the Health Ministry's office for life
style-related disease control.

Legally, he is correct; the health ministry lacks a mandate to advocate
strongly a policy on tobacco in the interests of public health. Nor does
it have nearly the influence that the Finance Ministry does. "Our mission
is to promote public health, and we are doing as much as we can under the
current distribution of authority," Mr. Takakura said.